A family budget is used to project the future income of the family and to balance it with its expenses. Learn to use it efficiently!
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Money-wise solo preneur
This book gives you the essential guide to easy-to-understand tips and strategies to achieve greater financial success.
This article was translated using AI technologies from our Spanish edition. Errors can occur as a result of this process.
A family budget is a document in which we project all future income for family members and weigh them against their future expenses.
The main goal in creating a family budget is to have better control over our expenses and always to make sure that the difference between income and expenses is as large as possible.
Since the world of entrepreneurship doesn't start or end in your business but also includes your home and family, it is important that you learn to create a good family budget to ensure orderly management of all your finances. Write these tips down and do them:
1. Make a list of your income and expenses
First of all, in the list of your income, you need to include all aspects such as salaries, investments and pensions of all people who contribute to the family circle, as well as the amounts from other entries such as companies.
In the column of expenses, you need to indicate the lease or dividend. Spending on groceries, water, electricity, gas, phone, cable, internet, transportation, clothing, personal hygiene, car fuel, credit cards, loan payments, even recreation.
2. Plan and detail your expenses realistically
It is important that you are realistic about your expenses. If you're spending zero pesos a month to cut your hair or other beauty expenses, you probably can't stick to that number. In this case, it is better to limit the time you go to the hairdresser or beauty salon than to eliminate the cost entirely.
3. Do the math
After you've created the income and expenses list, your income should be higher than your expenses. If not, you need to cut your spending. Be honest and reasonable about any costs you cut. You still need to eat so don't take away your grocery bills. However, you can find ways to save on grocery bills with coupons and smart shopping.
4. Include your family
Let your family know about the decisions you are making about your budget. You should also try to get family members old enough to understand the process to help you with difficult decisions. For example, if your teenage daughter has a cell phone, she may be able to stop texting so she can go to the movies.
5. Update your budget
Your budget will only work if you remember to update your spending throughout the month to make sure you are on the right track.
6. Make sure you save
The difference between the income and expenses of each month (balance) would be the savings you will get each month. You need to make sure that this saving is always positive and the greatest possible. It is recommended that it make up at least 10% of total income.
The sum of the monthly savings results in the total annual savings. With these savings, you can cover any emergency or contingency, invest in new businesses or investments, or give yourself a taste that will improve the quality of your life.